Dawson v. City of Lincoln

• Decision Date: 31 January 1964
• Docket Number: No. 35526,35526
• Citation: 125 N.W.2d 908,176 Neb. 311
• Parties: Julia DAWSON and LeRoy K. Dawson, Appellees, v. CITY OF LINCOLN, Nebraska, Appellant.
• Court: Nebraska Supreme Court

Page 908

125 N.W.2d 908

176 Neb. 311

Julia DAWSON and LeRoy K. Dawson, Appellees, v. CITY OF LINCOLN, Nebraska, Appellant.

No. 35526.

Supreme Court of Nebraska.

Jan. 31, 1964.

Syllabus by the Court

1. In a condemnation case, a lessee is entitled to recover on the same character and quality of proof as would entitle the condemnee owner to recover.

2. The owner of property, either real or personal, is qualified by reason of the ownership relation to give his estimate of the value of such property.

3. The volume of business done on any given leasehold has a direct relation to the value of the leasehold.

4. It is not necessary that a qualifying witness be familiar with every possible element that goes into the determination of market value.

5. The weight and credibility of conflicting testimony in a condemnation action are for the jury, and in testing such evidence, plaintiff condemnee is entitled to have all conflicts resolved in a light most favorable to him.

6. Valuation testimony, from either expert or lay witnesses, is ordinarily received if the witnesses show an acquaintance with the property and are informed as to the state of the market, the weight and credibility of their evidence being for the jury.

7. The admissibility of valuation testimony of a lay witness rests in the sound discretion of the trial court, and where persons are shown to be familiar with the particular land or leasehold in question, they may be permitted to testify as to value before and after the taking.

8. Evidence examined, and the verdict and judgment of $10,000 held not to be excessive under the circumstances.

Ralph D. Nelson, City Atty., Henry L. Holst, Deputy City Atty., Lincoln, for appellant.

Joseph J. Cariotto, Lincoln, for appellees.

Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ.

WHITE, Chief Justice.

This is a condemnation case. From a jury verdict and judgment for plaintiffs in the sum of $10,000, defendant City of Lincoln appeals. Of the numerous errors assigned, the defendant city only argues in this court the excessiveness of the verdict and errors in the admission in evidence of certain testimony of four witnesses.

The plaintiffs owned a leasehold interest in property at 4400 O Street on which, at the time of the taking, they were operating the 'Circle Drive-In' restaurant. The evidence shows that this operation depended on the free access to their leased premises from the flow of traffic on O Street. This condemnation proceeding took a temporary easement for construction purposes and appropriated a portion of the lot permanently for street purposes in connection with the construction of a new, widened arterial with a 'median' in the center. The time of the taking was June 14, 1961. The lease expired on March 17, 1962, and the rent reserved was $75 per month, this lease stemming from an original leasing agreement with the owners dating back to 1950. The plaintiffs owned all of the buildings and equipment on the premises. The property had no business access except off of O Street. All access was destroyed by the construction from June to approximately November 1961. The only way to get on the premises during this period of time was to walk. The plaintiffs paid $30,000 for the lease originally. They made substantial improvements during their operation and had an investment of over $20,000 in furniture, fixtures, and equipment at the time of the taking. Their volume of annual business was about $75,000 to $80,000. The business is seasonal with the peak being from May until fall depending on the weather.

The board of appraisers in county court awarded the plaintiffs $10,000 and on appeal the jury verdict and trial court judgment were for $10,000. No challenge is made to the pleadings, the scope of the submission of the issues, or the instructions as to the measure of damages by the trial court.

Error is assigned in permitting Julia Dawson, one of the owners and purchasers of the lease in question, to answer the following questions: 'Based on your experience, Mrs. Dawson, have you an opinion as to the market value of that lease from the time that the City condemned the property until the expiration of the lease the following March 17, 1962? * * * And what was that value, Mrs. Dawson?'

It is argued that there was insufficient foundation for the admission of the answers to these questions which fixed the valuation as between $14,000 to $15,000. The evidence shows she was an owner; that she and her husband actually operated the business on the premises since April 1950; that she managed the business; that she knew of the volume of business done; that they owned all of the buildings and equipment on the land; that the rent reserved was only $75 per month; that the taking of June 14, 1961, completely destroyed the volume of business; and that extensive improvements had been made and equipment installed since 1950 at a cost of over $25,000. Beyond this, the record reveals in intimate detail, familiarity with the property, the development of it for drive-in restaurant purposes over a period of 10 years, and ample testimony of the effect of the taking by the defendant on the business and physical operation of the leasehold. In a condemnation case, a lessee is entitled to recover on the same character and quality of proof as would entitle the condemnee owner to recover. State, Department of Roads v. Dillon, 175 Neb. 350, 121 N.W.2d 798; James Poultry Co. v. Nebraska City, 135 Neb. 787, 284 N.W. 273, followed and amplified on rehearing in 136 Neb. 456, 286 N.W. 337. The owner of real estate familiar with its value can testify as to its value. State, Department of Roads v. Wixson, 175 Neb. 431, 122 N.W.2d 72. In Johnson v. City of Lincoln, 174 Neb. 837, 120 N.W.2d 297, we said as follows: 'As stated in Miller v. Drainage Dist., 112 Neb. 206, 199 N.W. 28: 'The owner of personal property is qualified by reason of the ownership relation to give his estimate of the value of such property.' See, also, McGuire v. Thompson, 152 Neb. 28, 40 N.W.2d 237; Borden v. General Insurance Co., 157 Neb. 98, 59 N.W.2d 141.'

This witness testified extensively as to the use of these premises as a drive-in restaurant, its availability and adaptability to such use, and the volume of business accomplished in their, the owners', operation. That this type of testimony is admissible as foundation for opinion valuation of a leasehold, and even may be admitted as direct testimony-in-chief, is apparent from James Poultry Co. v. Nebraska City, 135 Neb. 787, 284 N.W. 273, wherein it was said: 'The value of a leasehold must be determined by consideration of the uses to which the property is adapted. All circumstances naturally affecting this value are open to consideration. Every legitimate use to which it may be applied may be considered. The market value of the unexpired term should be taken into consideration, also the situation, condition and use made, or that may be made, of the premises, and the nature and prosperity of the business carried on there, if it affects the value of the lease. Bales v. Wichita M. V. R. Co., 92 Kan. 771, 141 P. 1009, L.R.A.1916C, 1090. As to the extent of proof of elements, not as independent items of damage, but as it affects the market value, see Pegler v. [Inhabitants of] Hyde Park, 176 Mass. 101, 57 N.E. 327. The volume of business done on any given leasehold has a direct relation to the value of the leasehold, as volume is directly connected with the success of the business, and diminution of business means decrease in volume. See Gillespie v. City of South Omaha, supra [79 Neb. 441, 112 N.W. 582]; City of Omaha v. Flood, 57 Neb. 124, 77 N.W. 379; Chicago, R. I. & P. Ry. Co. v. O'Neill, 58 Neb. 239, 78 N.W. 521; Des Moines Wet Wash Laundry v. City of Des Moines, supra [197 Iowa 1082, 198 N.W. 486, 34 A.L.R. 1517].' (Emphasis supplied.) This precise holding has been followed in Phillips Petroleum Co. v. City of Omaha, 171 Neb. 457, 106 N.W.2d 727, 85 A.L.R.2d 570.

It is apparent from what has been said that there was ample foundation for her opinion, as an owner, of the valuation of $14,000 to $15,000 she placed on the value of this leasehold for the remaining term. Defendant argues she must testify as to familiarity with 'the value of leaseholds.' She was one of the owners, familiar with her own property, and as such competent to testify as to valuation. Defendant cites no case to support the proposition that, as a matter of foundation, an owner must be shown to be familiar with other leaseholds and their market value. It is not necessary that a qualifying witness be familiar with every possible element that goes into the determination of market value. Evans v. State Department of Roads, Neb., 125 N.W.2d 541; Medelman v. Stanton-Pilger Drainage Dist., 155 Neb. 518, 52 N.W.2d 328. Defendant further argues that the foundation testimony of this witness was impeached and destroyed on cross-examination. The weight and credibility of such testimony in a condemnation action are for the jury, and in testing them, plaintiff is entitled to have conflicts resolved in the light most favorable to him. O'Neill v. State Department of Roads, 174 Neb. 540, ...